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Failing to meet the government’s tax-collection target is a possibility for Philippine tax authorities, particularly the Bureau of Internal Revenue (BIR), as it bears the brunt of alleged corruption in flood control funds.
Department of Finance (DOF) Undersecretary Charlito Martin R. Mendoza told reporters on the sidelines of the 4th SGV Tax Symposium that between the BIR and the Bureau of Customs (BOC), the impact of the corruption issue has been felt more by the former.
“Admittedly, because of everything that’s happening, there is an impact on our tax revenues,” said Mendoza, who oversees the operations of both the BIR and the BOC, on Thursday, Oct. 23.
While Mendoza affirmed that corruption cases tied to flood control projects “definitely” have an impact on revenue collection, he said the BIR has suffered more from the effects of the issue.
“It really has an impact on revenue collection because, for the first half of the year, we were very much on track to meet the BIR’s collection target. Then there was a bit of a slowdown,” Mendoza said.
Tax collections accounted for ₱3.05 trillion, or the bulk of the ₱3.37-trillion total revenue collections from January to September. This reflected an 8.6-percent increase from ₱2.81 trillion in the same period in 2024.
In particular, the BIR collected ₱2.32 trillion as of end-September, up 10.9 percent from ₱2.09 trillion a year earlier. This accounted for 72.1 percent of the ₱3.22 trillion it was tasked to collect this year.
These collections were driven by higher receipts from corporate and personal income taxes (PIT), value-added tax (VAT), tobacco excise tax, and percentage tax on banks and financial institutions.
Similarly, the BOC collected ₱701.7 billion during the first nine months of the year, a 1.6-percent increase from ₱690.7 billion in the same period last year. This represented 73.2 percent of the ₱958.7 billion that the agency is tasked to collect for 2025.
Despite this growth, Mendoza said the government “might not be able” to meet its tax revenue target of ₱4.21 trillion this year, but the ₱4.52-trillion total revenue collection goal could still be achieved through non-tax revenues.
It can be noted, however, that non-tax revenues dropped by 34.7 percent to ₱314.1 billion at end-September from ₱481 billion a year earlier, mainly due to the “base effect of extraordinary non-recurring remittances in 2024.”
“We’re still confident that we will be able to meet the overall collection target for this year,” Mendoza said, echoing Finance Secretary Ralph G. Recto’s optimism.
“Once we’re able to correct the system, our momentum on tax revenues will pick up,” Mendoza assured, expressing hope that improvements could start to be felt by the last quarter of the year.
The 2025 revenue target is expected to be equivalent to 15.9 percent of gross domestic product (GDP).
